EURUSD short-term corrective structure

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Hello everyone,

I have been learning about Elliott Wave theory for quite some time now and I believe I am getting the hang of it. At least to the point that I would like to share my analysis.

In the short-term (2-3 days) I am neutral on the EURUSD, but in the longer term I believe the EURUSD will still see lower lows. The EURUSD spent a very long time (around 1,5 years) in a triangle that can be considered a fourth wave, which started breaking down impulsively right after the elections in the US.

When we hit the low at the beginning of this year the move up looks very corrective and overlapping, which is indicative of more downside to come. Now I believe we might have seen the first wave down since the beginning of February. The wave down subdivides nicely in 5 waves with proper Fibonacci relationships. The bounce we saw last week stopped exactly at the .5 retrace of that whole wave. I do not think that is the whole correction to the impulsive move down, but I could be wrong. I think it is likely that we see a C wave up that can form a Zig-Zag, which is a common pattern for waves 2 in Elliott Wave theory.

I will be looking to short the EURUSD on a 5 wave C up that hits the 1.000 extension of the A wave.

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It seems we might have to take the presumed purple B wave down as an impulse wave (1) of the larger third wave. The move up over the last week looked very corrective and subdivided nicely into an ABC, where the A wave was equal to the C wave and the retracement was exactly .618. Afterwards this forex pair moved down quite impulsively.

We will see this week whether the third wave gets started. In that case we should see a persistent move down through critical support levels.

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Also please note that the extra leg down we saw after I initially posted this idea led to a 5 wave move instead of a 3 wave move, thus making it less likely to be a B wave.

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The impulsive move up this last Friday invalidates the immediate 1-2 setup to the downside, in my opinion. At this moment I am considering two wave counts. Either we are in a larger ABC structure off the low made earlier this year, or the move that started last Friday is a C on a smaller scale that should find resistance at the .618 Fibonacci resistance level.

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